Periodic Pricing

Periodic Pricing

Reviewed by Faisal Zaidi

Expressing a total cost as a stream of small, frequent amounts, such as a daily figure in place of a yearly one.

What it is

Stephen Atlas and Daniel Bartels reported in 2018 that this framing changes how people tally the benefits of what they are paying for. On this site it is read alongside Mental Accounting and The Pain of Paying.

In effect

In their studies, a charity request framed as a small daily amount led people to think about the benefits of many small gifts, which they often found more appealing than one large gift. Across eight laboratory experiments and one field study, periodic pricing could raise perceived benefits, especially for the first few units.

What it does not say

It is not the same thing as Mental Accounting, which sits close to it on this site but describes a different part of how people decide. It also does not say that the finding reaches every product, buyer or setting; where this page goes beyond the cited research, the step is an inference and is labelled as one.

Sources

  1. Stephen A. Atlas is first author, with Daniel M. Bartels, of Periodic pricing and perceived contract benefits, published in the Journal of Consumer Research in 2018.
  2. Daniel M. Bartels is co-author, with Stephen A. Atlas, of Periodic pricing and perceived contract benefits, published in the Journal of Consumer Research in 2018.